I made my annual trek to the Ag Economic Outlook Forum at the University of Wisconsin Jan. 28. This great event is hosted by the Renk Agribusiness Institute at the university.
Last year I left the Ag Economic Outlook Forum with strong concerns about the future for our ag economy. The story last year was dire. We were hearing about low milk prices, farm closures and a new “normal” for agriculture after several years of declining prices and income.
This year I left the forum with more optimism than I have felt in a long time. Most of the forecasting was positive. The experts talked about opportunities for growth and expansion. Steve Deller, professor in the Department of Agriculture and Applied Economics at UW-Madison said that agriculture in Wisconsin is a $105 billion industry, which is a significant increase over five years ago, when the impact was $88 billion. He said that ag’s share of the state economy is growing.
Deller said that in southwest Wisconsin, 30% of all economic activity is related to agriculture. We grow a lot. But we also develop a lot of products. With the advent of the Dairy Innovation Hub at UW-Platteville, I am even more encouraged by this idea. We are on the right track.
Mark Stephenson, the Director of Dairy Policy Analysis and the Director of Dairy Profitability at UW-Madison, reflected the news that I am hearing from dairy farmers in the 17th state Senate District. Milk prices are rising! He said that this is due to slowing production in the U.S. and worldwide, declining stocks, trade improvements and the overall health of our national economy.
Stephenson said that people are eating their milk, rather than drinking their milk. Consumption of yogurt and cheese is rising while fluid milk sales continue to decline. He forecasted higher milk prices in 2020 than 2019.
Paul Mitchell, director of the Renk Institute, said that dairy farmer attrition still exceeds 10%, which is concerning. However herd sizes increased 31% over the last four years. Consolidation is still happening, but there may be good reasons for it. I talk to a lot of farmers all over the 17th Senate District. I hear the phrase – “60 and 60” – on a regular basis. It is used in reference to farmers leaving the industry who are in their 60s milking 60 cows. These farmers do not have children who want to take over the farm and they want to retire. These cows are purchased by other farms. Many of these farmers continue to farm, but not milk cows.
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Our workforce, throughout the state, is impacted by the vast retirement of baby boomers. Farming is no different. In fact, I believe that farming may be impacted even more. As some farmers say, “farming is a young man’s job.” Farming is physically demanding, 24/7/365 work that doesn’t quit. Our older farmers want to retire.
When they retire, they are selling their herds to larger farms, often family farms, made up of several families working together. The next generation of farming demands quality-of-life. They want to share the responsibilities of farming so that their families can take vacations, be involved in life off of the farm and live differently than their predecessors. I don’t think this is a bad thing!
The afternoon session of the forum focused on industrial hemp. The state Legislature took steps to legalize and support industrial hemp farming over the last several years. However, Wisconsin’s industrial hemp industry is very young, compared to other states and countries. Mitchell invited experts from Kentucky, Colorado and Canada to tell us about their progress and to offer advice.
The bottom line is that industrial hemp is not the short-term savior of the ag economy in Wisconsin. It is a risky investment with limited markets right now. We also have a lot of work to do to protect the supply chain and develop markets for producers. I recently talked to two farmers in the 17th District who invested in hemp. Neither of them have gotten a check yet. They’re still optimistic about the opportunity, but they do not consider it to be the “sure-thing” that it was sold as over the last several years.
In fact, I sat with a farmer at the forum who attended the forum because he was considering investing in hemp this spring and wanted to learn about the industry. By the end of the day, he had reversed his course. The forum may have saved him a lot of hardship and money this year!
Again, the Ag Economic Outlook Forum is a tremendous event. You can view all of the videos and materials from the forum on the Renk Institute’s website: https://renk.aae.wisc.edu/ag-outlook-forum. The forum bolstered my resolve to continue working on the nearly 40 bills before the legislature that impact agriculture before we gavel out of session this spring. Stay tuned.
For more information and to connect with me, visit my website http://legis.wisconsin.gov/senate/17/marklein and subscribe to my weekly E-Update by sending an email to Sen.Marklein@legis.wisconsin.gov. Do not hesitate to call 800-978-8008 if you have input, ideas or need assistance with any state-related matters.
Republican Howard Marklein, Spring Green, represents the 17th state Senate District.